If we express our knowledge in sentences, we will find that these sentences to some extent are linked by logical rules. We ask whether the structure logic imposes on our knowledge restricts what we forget and what we remember. The model is a two period S5-style modal logic. In this logic we...

I consider two seemingly unrelated puzzles; 1. Why is relative performance evaluation (RPE) used less in CEo compensation than agency theory suggests? 2. Why is sometimes, e.g., for fund managers, a mediocre performance more highly rewarded than excellence? I consider a simple tournament model,...

The allocation of talent in a society is an important determinant of productivity and growth. I study the informational role of education on the allocation of talent in a two-sector model where education provides workers information about their abilities. When workers and firms are equally...

We study the effects of local status, where workers compare their wage to the wage of other workers within the same firm. We assume a competitive labor market with unobservable effort, where firms condition wages on output as incentive for effort. If workers who care about status are also more...

We study selection contests in which the strategic variable is degree of risk rather than amount of effort. The selection efficiency of such contests is examined. We show that the selection efficiency of a contest may be improved by limiting the competition in two ways; a) by having a small...